Term Plan with Return of Premium

Term Plan with Return of Premium

In Term Plan with return of premium (TROP), you will get back all the premiums that you paid to the insurance company. It means when the policy gets expire, you will get your money back.

Term Insurance

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Rs.1 Crore Term Insurance Plan @ Rs.19/day*

As you approach different stages in life, there are dreams and aspirations that you set out for yourself and your family. But this does not set you free from the day to day responsibilities of managing the house, paying for health expenses, school fees, etc. Protect your today to secure your tomorrow.

We always aspire to offer our loved ones everything that they dream for, as much as we wish to secure them. Be it in their professional lives or personal lives, their happiness and protection is our ultimate aim.

This is where insurance comes in the picture. There are various plans offered by insurers but here we will discuss money back term plan.

These plans are also famous as Term Insurance Plans with Maturity Benefit. It means you will get maturity benefits with these types of plans.

A Term plan with Return of Premium is a contract between the applicant and the Life Insurance Company, under which the applicant agrees to pay a certain amount of money (Premium) per year for a fixed period in order to receive a guaranteed amount of money (sum assured) in the event of his death during the policy term, payable to his nominee (any family member).

And at the end of the policy term, on survival, the sum of all premiums (excluding rider, extra premium & taxes) paid will be returned to the policyholder.

Who Should Buy Money Back Term Plan?

A Term Plan with Return of Premium is best suited for individuals who have

  • Dependents (Children, parents, spouse)
  • Looking for a considerable sum of protection against the uncertainties of life (death).

Benefits of Term Plan with Return of Premium

  • The Cost of the policy is low and therefore the risk is minimum
  • The choice to add additional benefit or rider makes it more appealing as the policy along with the riders makes it a Total Protection Plan.
  • Usually, these policy plans come with an assurance to repay the premiums paid. However, the rider payments are not refunded.
  • The policy provides premium reimbursement at the time of maturity and therefore, the insured does not lose the premium paid during the term period.
  • Once you buy this kind of plan, the premium remains stable throughout the term of the policy unless the contract is tumbled and hence the insured can plan the payments accordingly. It also protects the insured from the additional burden arising due to increasing premiums as in case of other policy plans.
  • Moreover, these plans come with tax benefits as premium paid can be claimed as tax deduction under the Income Tax Act.

Comparison of top 3 term plans with return of premium option:

BasisMax Life Premium Return protection planAviva i-Shield Return of PremiumAegon life iReturn plan
Entry Age21-55 years (Maturity age- 75 years)18-55 years (Maturity age- 65 years)Minimum: 18-65 years(Maturity age- 75 years)
Policy Term20 to 30 years10 to 25 years5 / 10 / 15 / 20 years
Sum AssuredRs. 5 Lakh to Rs. 1 croreRs.15 Lakh to Rs.6 croresRs. 3 Lakh to 4 crores
Premium ReturnRefund all premium paid as well as the extra premium if any.110% of the premium will be repaid.Money refunded is equal to the premium you paid.

Additional Benefits


You can customize your insurance plan as per your requirements. There is an array of add-ons that you can choose on the top of your base term plan to enhance the coverage of your insurance.

Your insurance provider usually would give you the options of choosing from Accidental Disability Cover, Critical Illness Cover, Waiver of Premium Cover, etc. Depending on your needs and lifestyle you can choose the best add-on that suits you.

Comparison of Pure Term plan and Return of Premium Term Plans

BasisTerm PlanTerm Insurance with Return of Premium
Costsa pure term plan is the cheapest form of life insurance as it only charges you for the insurance cover.The ROP term plans are more expensive as they promise to pay the premiums paid at the end of the policy term.
ReturnsNo return on the premium at the end of the policy termIn case of a TROP term plan, even though you get the premiums back, you do not get any returns on your money
Surrender valueIf you decide to surrender a policy midway, a term plan does not return any money backIt acquires a surrender value only after the first 2-3 of years, but the surrender charges are very high.
Policy termAre usually available for a policy term of 40-45 years.It varies from company to company but a TROP plan is generally available for a policy term of 20-25 years.

Cons of a Return of Premium Policy

  • Return of Premium Costs More: One of the drawbacks of a Term Plan with Return of Premium Policy is that you can expect to pay a higher amount in the form of premium for your life insurance policy.
  • Must survive to the End of the Term: With a Return of Premium policy, the insured must complete your term to collect the money paid for the policy. If the insured dies before the insurance policy period, beneficiaries would receive the death benefits of the policy, but not the premiums paid by the insured up to that point.
  • Must Keep the Policy in Force: Another thing to keep in mind is that in case of a 20-year term policy, it needs to be ensured that the insurance policy is active for the entire period of 20 years. If due to any reason the policy lapses before the end, the insured does not get any of the premium money paid. So, it basically boils down to the simple fact that “it’s an all or nothing policy.”
  • No Interest: Another thing that should be kept in mind is that no interest is paid on the money when it’s returned. If the insured has paid 80,000 in premiums over 20 years, that’s what will be paid back and not a penny more. However, in some of the policies, the prescribed percentage is added to the premium paid by the insured at the time of refund.

Is a TROP plan the perfect choice for you?

That is a difficult question to answer because it varies from one person to another as we all are different individuals. It basically boils down to what you are looking for in the insurance policy.

If you want something in return after the policy gets over, this is the perfect choice for you. In fact, you can recover the entire cost of insuring yourself; a TROP plan can be your choice but keep in mind that it won’t pay the taxes paid over the years.

However, TROP plans have higher premiums since they have to return the premium back which might put some customers out of the picture.

Moreover, TROP plans are not exactly an investment. The return you get won’t be a profit; you will only get the money you’ve paid over the years so it’s basically getting your own money back without any returns.

Ultimately, whatever you decide or your circumstances are, it’s you who has to secure the future of your family in case of an unforeseen tragedy.

So Compare Term Insurance & Choose Best One For You!

FAQ (Frequently Asked Questions)

What is the concept of the term plan with return of premium (TROP)?

The concept of term plan with return of premium (TROP) is very simple and attractive. These plans return all the premium paid by you when the policy term gets expired.

Which is the best term insurance with the return of premium in India?

There are many insurance companies that offer money-back term insurance plans in India, So the only way to find the best plan is by comparing their features, benefits, and premiums online.

Return of premium term plan is a good option or not?

Yes, definitely these money back term plans are a good option to opt if you are looking for term insurance. The premium of money back term plans is a little bit higher in comparison to normal term insurance plans.

Will the premium change in the coming years, or will constant till the policy term?

No, the premium will not change, It will be the same for the whole policy term.

Is money back term insurance plan comes with riders?

Yes, there are various types of rider available to opt for. You can add a rider to your policy according to your needs.

Which insurance companies currently offering term insurance with return of premium in India?

Here is a list of some companies that are currently offering money-back term insurance plans.
> HDFC Life Insurance
> Tata AIA Life Insurance
> Aviva Life Insurance
> Aegon Life Insurance
> ICICI Life Insurance
> PNB Met Life Insurance
> Max Life Insurance

How to buy a term plan with the money back option?

Buying a term plan with money back is very easy. Just calculate & compare premiums online, and our highly professional and experienced insurance experts will help you to buy online.

Term Insurance

Compare Top Term Insurance Plans

Rs.1 Crore Term Insurance Plan @ Rs.19/day*

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